Opposition calls on government to cap ad valorem tax on petroleum products as global energy crisis looms

As the Government implements a revised Petrojam pricing mechanism to keep up with escalating global oil prices, there is a fresh call to cap the ad valorem tax on petroleum products.

The renewed call comes from Opposition Spokesperson on Finance, Julian Robinson, as he proposes a strategy to reduce market pressures resulting from the war in the Middle East.

During a post-Cabinet press briefing on Wednesday, Energy Minister Daryl Vaz said that while Petrojam’s pricing mechanism has so far absorbed the costs on consumers, this cannot be sustained long-term.

He pointed out that if Petrojam continued to use that pricing mechanism up to June, it would cost the Government $11.8 billion.

Mr. Vaz said this sort of support is unaffordable, adding that a new tiered pricing mechanism must be considered.

Reacting to the Minister’s remarks, Mr. Robinson said there is a way to ease the burden.

Mr. Robinson is also urging the Government to apply serious thought before making any decision about limiting movement on the island to conserve fuel.

Restricted movement is one of several “COVID-style” measures Mr. Vaz is proposing in response to the looming energy crisis.

Mr. Robinson said such measures require discussions to determine if they would lead to a definitive reduction in fuel consumption.